Are  Our  Railroads  Fairly  Treated? 


ADDRESS 

of 


BENJAMIN  F.  BUSH 

PRESIDENT  OF  THE  MISSOURI  PACIFIC  RAILWAY 
COMPANY  AND  THE  DENVER  & RIO  GRANDE 
RAILROAD  COMPANY 


before  the 


ECONOMIC  CLUB 

AT  NEW  YORK  CITY,  TUESDAY,  APRIL 
TWENTY-NINTH,  NINETEEN  HUNDRED 
AND  THIRTEEN 


On  being  introduced  by  President  Speyer,  Mr.  Bush  said : 
Mr.  President  and  Gentlemen  of  the  Economic  Club: 

A careful  and  impartial  analysis  of  the  railroad  situation  as 
it  exists  today,  irresistibly  forces  the  conclusion  that  there  is  no 
subject  before  the  people,  no  policy  engaging  the  attention  of 
the  Government,  that  in  its  future  economic  aspect  foreshadows 
more  dangers,  both  to  the  commerce  of  this  country  and  to  our 
institutions,  than  does  that  of  railroad  transportation;  there- 
fore, that  it  be  solved  rightly  it  should  receive  the  most 
scrupulous  consideration. 

The  wonderful  commercial  progress  of  the  United  States  has 
been  made  possible  only  by  the  railroads.  Since  1870,  when 
the  impetus  given  railroad  construction  began,  the  wealth  of 
this  country  has  increased  from  $30,000,000,000  to  the  enor- 
mous sum  of  $140,000,000,000.  Its  foreign  commerce,  in  the 
main  largely  dependent  upon  the  railroads,  from  $800,000,000 
to  $4,000,000,000.  The  internal  commerce  of  the  railroads 
today  has  reached  the  stupendous  figures  of  over  293,000,- 
000,000  of  units  of  service — being  the  tons  of  freight  hauled 
one  mile  and  the  passengers  carried  one  mile. 

The  volume  of  this  railroad  commerce  has  nearly  doubled 
in  twelve  years,  and  taking  cognizance  of  the  alert  and  pro- 
gressive spirit  of  our  people  and  our  still  latent  and  undevel- 
oped resources — in  farm,  mine,  forest  and  factory,  an  alluring 
promise  is  foreshadowed  for  a continued  increase. 

The  fulfillment  of  this  promise  rests  entirely  upon  the  ability 
of  the  railroads  to  improve  their  existing  plants  to  a higher 


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state  of  efficiency,  to  extend  their  lines  into  the  undeveloped 
regions  and  thereby  provide  the  necessary  facilities  for  the 
prompt  movement  and  distribution  of  the  products  arising 
from  the  awakened  activity.  The  commercial  supremacy  of 
the  world  is  the  heritage  of  our  Nation  if  the  means  at  our 
command  are  wisely  applied. 

As  to  how  the  railroads  can  secure  the  money  necessary 
to  make  the  improvements  and  extensions  to  efficiently  provide 
for  the  carriage  of  the  existing  and  increasing  traffic,  so  that 
all  lines  of  industry  may  develop  and  operate  to  full  advantage 
and  our  vast  tide  of  commerce  still  further  expand  and  flow 
unrestricted  to  its  final  haven,  is  “The  Railroad  Problem”. 

As  the  conditions  are  today,  by  reason  of  not  having  the 
means  at  their  command,  the  railroads,  with  few  if  any  excep- 
tions, cannot  give  proper  movement  to  the  large  volume  of 
existing  traffic.  This  was  likewise  true  in  1906,  1907,  1910 
and  1912.  The  transportation  facilities  are  not  keeping  pace 
with  the  increasing  traffic  requirements. 

At  the  period  of  their  inception,  railroads  were  crudely  con- 
structed, but  they  supplied  the  needs  of  the  time  in  moving 
the  sparse  traffic  then  offered  for  shipment.  They  were  built 
on  the  lines  of  least  resistance  to  meet  the  varying  character- 
istics of  the  contour  and  topography  of  the  country  traversed. 
Later,  with  the  growth  of  traffic  and  more  urgent  requirements, 
radical  improvements  had  to  be  made  to  meet  the  changed 
conditions.  Practically  the  lines  had  to  be  almost  rebuilt — 
in  reducing  grades,  eliminating  curves,  replacing  wooden  with 
more  substantial  steel  and  concrete  bridges,  widening  roadbed 
and  embankments,  ballasting  track,  deepening  and  widening 

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ditches,  constructing  cross-drains,  building  viaducts  over  road 
crossings,  building  sidings,  passing  and  double  tracks,  provid- 
ing heavier  rails  and  ties,  larger  engines  and  cars,  spacious 
terminals  in  large  cities,  more  commodious  station  buildings, 
engine  houses,  shops  and  many  other  appurtenances.  As  the 
means  have  permitted,  this  work  of  rebuilding  and  enlarging 
and  improving  the  roadbed  and  equipment  has  been  prose- 
cuted, so  that  a higher  standard  of  service  and  efficiency  might 
be  forthcoming.  Billions  of  dollars  have  been  already  expended 
in  this  work,  but  much  yet  remains  to  be  done  before  the 
roads  reach  that  stage  of  completion  that  the  constantly  increas- 
ing traffic  can  be  satisfactorily  handled.  This  will  require 
more  billions  of  dollars.  The  money  cannot  be  supplied  from 
earnings,  as  on  account  of  inadequate  compensation  for  service 
rendered  the  earnings  in  many  cases  are  scarcely  sufficient 
to  maintain  the  properties  in  a solvent  condition. 

How  then  can  this  necessary  capital  be  obtained  ? A railroad 
to  obtain  money  for  extensions  into  new  fields  or  for  the 
improvement  of  existing  lines  must,  like  a merchant,  have  an 
established  credit.  It  must  be  able  to  show  by  past  or  current 
operations  that  it  will  be  able  to  meet  the  new  interest 
obligations  it  assumes  and  have  a surplus  over  and  above  all 
its  requirements.  Not  many  railroads  are  able  to  do  this  under 
the  existing  operating  conditions  of  high  wages  paid  for  labor, 
increased  cost  of  materials,  the  higher  standard  of  service 
demanded  by  the  people  and  governmental  compulsory  expense 
and  regulation  of  charges  for  transportation. 

Legislation  of  the  most  onerous  character  has  in  recent 
years  been  enacted  by  Federal  and  State  authority,  entailing 

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numerous  expenditures  without  any  compensatory  provision, 
many  of  the  acts  being  entirely  without  beneficial  results  to 
the  public  and  only  an  economic  waste.  Three  or  four  bills 
now  being  urged  upon  Congress  are  estimated  to  involve  an 
expenditure  by  the  railroads  within  the  next  four  years  of 
nearly  $1,500,000,000. 

These  many  expenses  over  which  the  railroad  manager  has 
no  power  of  control  have  steadily  increased  the  unit  cost  of 
operation,  and  as  the  unit  of  compensation  for  transportation 
service  is  regulated  by  Federal  and  State  authority  and  is 
more  often  reduced  than  advanced,  it  follows  that  the  unit 
of  profit  is  steadily  decreasing.  If  these  two  opposing  units 
of  conditions,  cost  and  compensation,  are  allowed  to  continue 
in  their  course,  it  means  they  will  meet  in  time  and  all  profit 
will  be  expunged. 

It  may  be  thought,  however,  that  the  revenue  derived  from 
the  increased  business  will  more  than  offset  the  increased 
expense.  Such  is  the  view  of  the  ordinary  layman  who  has 
given  the  matter  only  cursory  study.  If  the  roads  were  not 
working  to  their  full  capacity — that  is,  if  they  had  unused 
engines,  cars,  tracks  and  terminal  facilities,  they  could  to  some 
degree  for  a time  offset  the  increased  expenses  by  additional 
earnings,  but  when,  as  in  1906,  1907,  1910  and  1912,  they  were 
burdened  with  business  beyond  their  capacity,  the  excess  entails 
an  expense  much  greater  than  the  average  cost. 

The  gross  earnings  of  the  railroads  increased  largely  during 
the  last  half  of  1907,  but  notwithstanding  this,  the  net  earnings 
decreased  over  $22,000,000.  For  the  last  six  months  of  1910 
the  gross  earnings  increased  over  $55,000,000,  while  the 

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expenses  increased  over  $84,000,000.  The  volume  of  traffic 
moved  in  those  years  was  very  large,  and  for  many  months 
was  in  excess  of  the  capacity  of  the  carriers. 

The  Interstate  Commerce  Commission  in  1907  declared  that 
the  inadequacy  of  transportation  facilities  was  alarming,  yet 
when  the  railroads  sought  to  advance  their  rates  in  1910  to 
enable  them  to  make  better  provision  for  the  public  demands 
and  establish  a higher  financial  credit,  the  Commission  would 
not  sanction  the  advance.  The  earnings  for  the  roads  for  the 
two  following  years,  1911  and  1912,  increased  $11,054,000,  but 
the  operating  expenses  and  taxes  were  swelled  $98,544,000, 
leaving  a less  net  revenue  for  1912  than  for  1910  by  $87,- 
490,000.  This  loss  was  equivalent  to  the  impairment  of  their 
ability  to  raise  over  $2,187,000,000  at  4 per  cent.  It  is  thus 
that  the  net  revenues  of  the  railroads  are  depleted  and  their 
inability  to  borrow  money  is  further  emphasized.  If  the  rail- 
roads could  retrieve  such  yearly  net  losses,  they  would  be  able 
to  strengthen  their  credit  in  the  financial  marts  and  raise  the 
necessary  funds  to  meet  the  exigent  demands  of  the  business 
public. 

It  is  a mistaken  conception,  though  one  generally  prevalent, 
that  the  railroads  are  overcapitalized  and  seek  to  obtain  exorbi- 
tant rates  from  the  public  to  pay  interest  on  the  excessive 
capital.  The  fact  is  that  the  physical  properties  of  the  rail- 
roads could  not  be  duplicated  today  for  anything  like  the 
present  capitalization.  The  money  of  the  owners  which  has 
not  been  capitalized,  that  has  been  expended  on  the  roads 
from  year  to  year  since  their  pioneer  days,  in  betterments  and 
improvements,  roadbed,  equipment  and  their  accessories,  has 

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long  since  absorbed  any  water  there  may  have  been  in  the 
securities. 

Such  high  authority  as  the  Interstate  Commerce  Commission 
declared  some  time  ago  that  the  value  of  the  physical  prop- 
erties of  the  American  railroads  was  more  than  that  repre- 
sented by  their  stock  and  bonds.  This  capitalization  is  less 
than  one-fourth  that  of  the  English  railways  and  less  than 
one-half  that  of  the  other  European  countries ; yet  high  as  this 
capitalization  of  foreign  railroads  is,  they  are  permitted  to 
charge  such  rates  as  yield  reasonable  net  returns. 

The  average  rate  received  by  the  United  States  railroads 
for  hauling  a ton  of  freight  one  mile  is  three-quarters  of  one 
cent,  while  the  rate  received  in  England  for  a like  service  is 
over  two  and  a quarter  cents,  or  three  times  as  much.  The 
rates  of  other  European  countries  are  also  much  higher  than 
ours.  As  has  been  well  said  by  Mr.  Hill,  “The  American 
railway  pays  the  highest  wages  in  the  world  out  of  the  lowest 
rates  in  the  world,  after  having  set  down  to  capital  account 
the  lowest  capitalization  per  mile  of  any  of  the  great  countries 
of  the  world.”  He  might  have  added,  they  also  give  the  best 
service  in  the  world. 

I believe  it  can  be  truthfully  said  that  the  causes  of  complaint 
in  the  past  against  the  railroads  have  been  entirely  eliminated. 
The  published  tariff  of  charges,  accessible  to  all,  governs  today, 
without  discrimination  or  favoritism  to  any  shipper.  Com- 
plaints may  arise  and  do  arise  as  to  rates  on  specified  com- 
modities between  given  markets,  on  account  of  their  relation 
to  the  rates  on  like  or  correlated  commodities  to  and  from 
other  markets.  These  complaints  grow  out  of  the  rivalry 

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between  communities  and  are  the  main  grievances  of  shippers 
now  brought  before  the  Commission. 

Shippers  naturally  endeavor  to  get  the  lowest  rates  possible, 
and  from  the  standpoint  of  their  individual  interests  they 
believe  that  unjust  inequalities  exist  in  rates,  although  such 
inequalities  may  be  the  result  of  inexorable  economic  laws 
beyond  the  carrier’s  power  to  control.  In  the  adjustment  of 
these  differences  between  markets  or  rival  communities,  the 
decision  of  the  Commission  is  almost  invariably  in  the  direction 
of  reducing  the  higher  rates  to  the  lower  level.  In  this  way 
there  is  a constant  nibbling  at  the  rate  fabric,  which  ultimately 
will  prove  as  injurious  as  a general  reduction. 

It  is  axiomatic  that  mutuality  of  interest  exists  between 
the  railroads  and  the  shipper;  that  one  cannot  prosper  unless 
the  other  does  and  that  injury  to  one  will  later  bring  injury 
to  the  other.  If  the  shipper  is  charged  unreasonable  rates  or 
is  afforded  poor  service  for  the  transportation  of  his  wares, 
he  suffers  in  his  business,  and  this  in  time  re-acts  upon  the 
carrier.  On  the  other  hand,  if  the  carrier  receives  insufficient 
compensation  for  its  service  by  reason  of  inconsiderate  legisla- 
tion, or  by  unwise  direction  of  regulative  authority,  undue 
burdens  are  imposed  which  increase  its  expense,  then  it  may, 
for  lack  of  means,  be  unable  to  maintain  its  former  standard 
of  service  and  thus  the  shipper  and  the  carrier  are  both 
injured. 

I recognize  that  the  railroads  are  in  duty  bound  to  serve  the 
public  in  the  best  possible  manner  and  that  the  public,  through 
the  State,  has  the  authority  to  regulate  their  operations,  but 
when  that  authority  is  exercised  with  reference  to  the  most 


I 


minute  and  varied  details,  burdening-  the  carrier  with  an 
unnecessary  expense,  which  it  cannot  afford,  then  it  would 
seem  only  just  that  the  public,  through  the  State,  should  allow 
it  the  necessary  protection  in  the  way  of  maintaining  com- 
pensatory rates.  This  is  on  the  principle  that  the  right  to 
regulate  or  control  carries  with  it  the  obligation  of  reasonable 
protection.  Authority  carries  with  it  responsibility  and  con- 
trol imposes  the  duty  of  protection.  I believe  that  the  same 
principle  of  justice  should  be  administered  to  an  association 
of  individuals  known  as  a corporation  as  is  administered  to 
the  individuals  personally  in  other  capacities. 

Considering  what  the  railroads  have  done  through  the  invest- 
ment of  private  capital — in  upbuilding  and  developing  the 
country,  improving  the  conditions  of  living,  uplifting  the  people 
and  adding  to  all  the  comforts  and  conveniences  of  life,  they 
certainly  are  entitled  to  that  necessary  protection  which  will 
enable  them  to  continue  in  their  vocation  and  elevate  to  a 
still  higher  plane  the  social,  commercial,  industrial  and  agri- 
cultural conditions  of  our  people. 

An  eminent  public  official,  an  authority  upon  this  subject, 
has  said:  “No  just  legislation  upon  this  subject  will  proceed 
upon  the  theory  that  the  public  alone  is  in  need  of  protection 
and  that  the  railroads  can  take  care  of  themselves.  I have  no 
sympathy  with  such  an  unfair  and  illogical  contention/’ 

The  United  States  census  returns  show  that  from  1900  to 
1910  the  capital  value  of  agriculture  increased  from  nearly 
$20,500,000,000  to  $41,000,000,000,  or  100  per  cent,  and  the 
capital  value  of  manufactures  increased  from  $9,000,000,000 
to  nearly  $18,500,000,000,  or  over  105  per  cent,  while  the  cap- 


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ital  of  the  railways  increased  from  $10,250,000,000  to  less 
than  $14,500,000,000,  or  only  40  per  cent. 

Here  we  have  an  increase  in  the  capital  of  $30,000,000,000 
in  those  two  important  industries  of  agriculture  and  manu- 
facture which  are  almost  entirely  dependent  upon  the  trans- 
portation lines  for  their  successful  operation,  whereas  the 
capital  of  the  transportation  lines  with  their  many  appurte- 
nances increased  only  to  the  value  of  $4,250,000,000. 

And  again,  we  find  that  the  value  of  the  products  of  manu- 
factures increased  from  $11,500,000,000  to  over  $20,500,000,- 
000,  or  81  per  cent.  As  the  railroads  get  a double  haul  on  a 
large  portion  of  manufactures — the  raw  material  in  to  the 
factory  and  the  finished  product  out,  it  may  be  judged  how 
essential  it  is  that  they  keep  abreast  of  the  times  in  road  and 
equipment  to  properly  take  care  of  the  constantly  increasing 
tonnage  implied  by  these  enormous  values.  The  largely 
increased  volume  of  agricultural  products,  which  last  year 
exceeded  $9,000,000,000  in  value,  must  meet  with  more  prompt 
consideration  on  the  part  of  the  carrier,  for  through  the 
economic  conditions  governing,  the  greater  portion  of  it  is 
rushed  to  market  within  a limited  time. 

The  census  further  shows  that  notwithstanding  the  large 
increase  in  the  capital  of  manufactures  of  105  per  cent,  the 
net  return  to  the  owners  on  the  total  of  $18,500,000,000  was 
over  12  per  cent.  Yet  on  the  railway  capital  there  was  noth- 
ing paid  on  $3,500,000,000,  and  less  than  5 per  cent  on  $7,500,- 
000,000.  The  services  of  the  railroads  make  secure  the  most 
liberal  returns  on  the  enormous  capital  of  $59,500,000,000 
invested  in  these  two  industries,  and  therefore  the  manufac- 

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turers  and  farmers  should  willingly  aid  in  an  effort  to  get 
the  transportation  rates  advanced.  It  is  of  paramount  impor- 
tance to  their  own  continued  welfare  that  they  exert  them- 
selves in  that  direction. 

I have  already  alluded  to  the  immense  volume  of  traffic 
conducted  by  the  railroads  and  to  the  fact  that  it  has  increased 
double-fold  in  twelve  years.  Will  it  continue  to  increase  in 
the  same  ratio  in  the  coming  years? 

The  marvelous  resources  and  latent  strength  of  this  country 
are  in  many  respects  scarcely  trenched  upon.  Of  the  total 
land  area  of  the  country  46  per  cent  is  in  farms,  but  of  this 
land  in  farms  only  54  per  cent  is  improved.  Only  25  per  cent 
of  our  great  domain  is  producing  anything  of  value.  My 
friend,  ex-Governor  Hadley  of  Missouri,  when  in  office,  stated 
in  a public  address  that  the  development  of  Missouri’s  natural 
resources  had  scarcely  begun;  that  there  were  three  counties 
in  the  State  which  had  no  railroads  and  seven  counties  with 
less  than  twenty-five  miles;  and  that  of  the  44,000,000  acres 
of  land  in  the  State  more  than  one-half  had  never  been 
touched  with  a plow.  A like  statement  is  applicable  to  many 
of  our  Western  and  Southern  States.  The  opening  up  and 
cultivation  of  these  undeveloped  lands  by  the  building  of  rail- 
roads would  give  a further  impetus  to  general  trade  and 
industry. 

Then  again,  our  farmers  are  now  awakened  to  the  benefits 
to  be  derived  from  the  application  of  scientific  methods  in 
agriculture  and  more  intensive  yields  will  be  the  result.  A 
more  careful  culture  of  our  wheat  lands  will  easily  double 
the  yield  and  still  be  less  than  that  of  European  countries, 


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whose  land  has  been  under  cultivation  for  more  than  2,000 
years.  A like  increase  can  be  effected  in  the  other  cereals 
and  products  of  the  soil.  Our  project  for  the  reclamation 
of  the  swamp  and  arid  lands  goes  on  apace. 

There  are  vast  mining  lands  with  their  hidden  treasures  yet 
awaiting  development.  The  completion  of  the  Panama  Canal 
will  open  to  us  more  directly  the  trade  of  the  Orient  and 
Western  South  American  countries  with  their  hundreds  of 
millions  of  beings  whose  wants  may  be  supplied  with  our 
merchantable  wares.  The  value  of  our  exports  of  manufac- 
tures is  now  over  $1,000,000,000  annually,  and  at  the  present 
rate  of  increase  it  doubles  every  three  or  four  years.  Our 
foreign  trade  in  other  commodities  is  taking  on  a greater 
momentum. 

In  all  these  we  have  a magnificent  vista  of  possibilities  which 
portends  the  continual  upward  trend  of  our  trade  and  com- 
merce with  its  concomitant  of  future  steady  employment  for 
our  people — the  desideratum  of  all  governments.  The  illim- 
itable prospects  betoken  its  continuance  if  ample  provision  is 
made  for  transportation. 

Now,  with  the  present  traffic  of  the  railroads  reaching  the 
stupendous  figures  of  over  293,000,000,000  of  units  of  service, 
what  will  the  future  increase  mean  if  kept  up  in  the  ratio 
of  the  past? 

You  all  know  something  of  the  capacity  of  the  New  York 
Central  Railroad  within  your  own  great  State,  and  the  mag- 
nitude of  its  operations  and  transportation  facilities.  Four 
per  cent  of  the  volume  of  traffic  now  annually  moved  by  our 

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railways  would  at  the  present  day  tax  the  full  capacity  of  that 
road,  working  day  and  night  for  one  year.  As  the  railroads 
operated  to  their  full  capacity  in  years  of  active  business,  like 
last  year  and  other  past  years,  an  idea  may  be  formed  from 
this  illustration  of  the  magnitude  of  the  work  that  will  have 
to  be  done  in  fitting  response  to  the  demands  of  commerce. 
The  commerce  is  increasing  on  an  average  of  8 per  cent  and 
more  per  year,  and  notwithstanding  one-half  of  this  yearly 
increase  would  tax  the  capacity  of  one  of  the  first  railroads  in 
the  land,  no  provision  is  being  made,  and  no  provision  can  be 
made,  under  the  rates  now  received  for  transportation  service 
for  the  proper  and  safe  conduct  of  this  prospective  traffic. 

Can  the  railroads  meet  this  serious  situation  with  which 
they  are  confronted?  Yes,  if  allowed  to  charge  a fair  com- 
pensation for  their  services.  The  railroads  now  receive  on  an 
average  per  mile  7^4  mills  for  hauling  a ton  of  freight  and 
less  than  2 cents  for  carrying  a passenger.  If  this  average 
compensation  could  be  increased  even  one  mill,  or  the  equiv- 
alent of  the  price  of  a postage  stamp  for  twenty  miles’  service, 
it  would  extricate  them  from  all  further  trouble  and  anxiety. 
It  is  scarcely  conceivable  that  such  a slight  advance  would 
injuriously  affect  any  trade,  industry  or  person,  yet  it  would 
be  the  means  of  conferring  untold  benefits  upon  the  entire 
business  of  the  country. 

The  Honorable  Martin  A.  Knapp,  late  Chairman  of  the 
Interstate  Commerce  Commission,  who  had  twenty  years’ 
experience  on  that  Board,  after  a careful  study  of  this  question 
from  all  view  points,  expressed  his  deliberate  judgment  as 
follows : 

14 


“Without  regard  to  the  personnel  of  railroad  officials,  with- 
out regard  primarily  to  the  interest  of  stockholders,  but  in  the 
interest  of  public  welfare  and  national  prosperity,  we  must 
permit  railroad  earnings  to  be  adequate  for  railway  improve- 
ment at  advantage  and  profit. 

“The  prosperity  of  the  country  is  measured,  and  will  be 
measured,  by  the  ability  of  its  railways  and  waterways  to 
transport  its  increasing  commerce.  With  a country  of  such 
vast  extent  and  limitless  resources,  with  all  the  means  of  pro- 
duction developed  to  a wonderful  state  of  efficiency,  the  con- 
tinued advancement  of  this  great  people  depends  primarily 
upon  such  an  increase  of  transportation  facilities  as  will  pro- 
vide prompt  and  safe  movement  everywhere  from  producer 
to  consumer;  and  that  we  shall  not  secure  unless  the  men 
who  are  relied  upon  to  manage  these  great  highways  of  com- 
merce have  fitting  opportunity  and  the  capital  which  is  required 
for  their  needful  expansion  is  permitted  to  realize  fairly 
liberal  returns.” 

If  the  railroads  are  not  allowed  to  charge  a compensation 
for  their  services  that  will  enable  them  to  make  a fair  return 
on  the  investment  with  a reasonable  surplus  for  betterments, 
improvements  and  the  establishment  of  their  credit,  the  task  on 
their  part  of  meeting  the  situation  will  be  hopeless.  In  equity 
and  justice  they  are  entitled  to  this,  and  I believe  if  the  ques- 
tion were  understood  in  its  different  phases  the  good  sense 
and  fairness  of  the  American  people  would  be  asserted  in  sup- 
port of  the  railroads. 

Not  only  have  the  railroads’  expenses  steadily  increased  of 
late  years,  but  the  purchasing  power  of  the  compensation 

15 


received  for  their  service  has  decreased.  In  other  words,  while 
the  value  of  a given  quantity  of  farm  products  will  purchase 
69  per  cent  more  ton  miles  of  transportation  than  in  1900, 
the  purchasing  power  of  the  compensation  received  by  the 
railroads  for  the  transportation  one  mile  of  a given  number  of 
tons  of  freight  in  1910  was  13  per  cent  less  than  in  1900. 

With  these  adverse  conditions  confronting  the  railroads,  it 
is  absolutely  necessary  in  order  that  they  perform  their  func- 
tions to  the  public  that  they  be  allowed  to  advance  at  an  early 
date  their  service  charges.  This  is  a matter  of  more  vital 
concern  to  the  welfare  of  the  entire  people,  than  it  is  to  the 
individual  owners  of  the  railroads. 

If  the  railroads  deteriorate  in  the  service  rendered,  as  they 
undoubtedly  must  if  the  conditions  are  not  changed,  it  unmis- 
takably means,  that  commerce  will  be  retarded;  that  industry 
will  languish ; that  the  many  fruits  of  agriculture  will  wane ; 
that  the  proud  eminence  we  have  attained  in  our  many  varied 
pursuits  will  crumble,  and  the  unrest,  discontent  and  dissatis- 
faction of  an  unemployed  people  may  lead  to  the  establish- 
ment of  a new  order  of  things  with  respect  to  the  ownership 
and  operation  of  the  railroads  of  the  country,  with  the  attend- 
ant dangers  to  the  perpetuity  of  our  republican  institutions. 
So  the  conclusion  is  irresistibly  forced  upon  us  that  this  rail- 
road question  is  a Government  problem,  and  one  of  very  grave 
and  serious  concern,  which  should  be  satisfactorily  settled,  and 
the  ominous  dangers  threatened  averted  thereby. 

The  President  of  the  United  States,  before  his  inauguration 
into  office,  asserted  that 

16 


“The  measure  of  service  rendered  by  business  to  the  people 
will  be  the  measure  by  which  the  merit  of  business  shall  be 
judged.” 

The  railroads  can  accept  this  declaration  and  be  satisfied  to 
stand  or  fall  by  its  concrete  application. 

I believe  it  will  always  be  found  that  in  any  estimate  made 
of  the  dignity  and  strength  of  our  Nation,  of  the  enlighten- 
ment and  social  comforts  of  our  people,  of  the  wealth  and 
commercial  greatness  of  our  country,  the  significance  of  the 
railroads  must  stand  forth — a marked,  conspicuous  and 

IMPORTANT  FEATURE. 


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